Since education makes a person more likely to leave your region, how do you justify your investment in human capital?

Thursday, October 20, 2011

Stabilizing Cities

Whatever the direction of the trend, a stabilizing city is a place finding population equilibrium. The story in the Rust Belt is one of arresting decline. The Sun Belt is struggling with the legacy costs of spectacular growth. Richard Florida on the emerging paradox:

The North, [Mancur Olson] argued, may have suffered from outmoded labor-management practices and too much hardening of its organizational arteries. The South and West, he speculated, were more wide open territories where new kinds of industries and new ways of organizing might be able to take root. In retrospect, it's clear that Olson had painted America's economic geography with too broad a brush. Some Sunbelt cities, especially the ones that bought into sprawling housing development as a substitute for real growth, have fallen victim to the economic crisis. And there are cities in the once-dying Frostbelt -- such as Ann Arbor, Madison, and even Pittsburgh -- that have built new knowledge and creative economies around their great universities.

Yet despite all the gloom, there is a bit of a sense that things might just be starting to turn, and the reason is simple: Detroit is now incredibly cheap. And that has drawn some admittedly rather pioneering types back into town.

Olson's wide open territory exists in inner-city Detroit. America's economic greenfields are shifting from Sun Belt suburbia to Rust Belt urban chic. There are similar greenfields in the Rust Belt cities of the South, such as Chattanooga. In retrospect, Olson could not have been more precise.

And there is hope. Bruce Katz of the Brookings Institution has long believed these cities will once again be the engines of their regional economies. Pittsburgh, for instance, reinvented itself as a successful tech and health hub, even as its population continues to fall. As Aristotle put it, “a great city should not be confounded with a populous one.”